This is the Acadian Timber Corp 2024 annual general meeting. Please note the meeting is being recorded. I would like to introduce Malcolm Cockwell, Chairman of Acadian. Mr. Cockwell, please go ahead.
Thank you, Operator, and good morning, ladies and gentlemen. It is my pleasure to welcome everyone to the Acadian Timber Corp annual general meeting. It is now 11:00 A.M. Eastern Time, and time to start the 2024 annual meeting. My name is Malcolm Cockwell, and as Chairman of the corporation, I will chair the meeting. With me today are the directors of Acadian: Heather Fitzpatrick, Karen Oldfield, Erika Reilly, and Bruce Robertson. Also in attendance are Adam Sheparski, President and Chief Executive Officer and Director of Acadian, and Susan Wood, Chief Financial Officer of Acadian. We are committed to open communication and are pleased to host the meeting through TSX Trust Company's virtual meeting platform, accessible to all of our shareholders regardless of physical location to participate and view the meeting.
I officially call the meeting to order and appoint Susan Wood to act as Secretary of the meeting and Jordan Shafee of TSX Trust Company to act as Scrutineer of the meeting. Only registered shareholders who held shares in their name as of March 28, 2024, the record date of this meeting, or their validly appointed proxy holders, are entitled to vote and ask questions at this meeting. Before we turn to the business before us, I would like to deal with a few procedural matters. The business of the meeting is described in the Management Information Circular dated March 28, 2024, which accompanied the notice of meeting. I will take the notice of meeting as read. We will conduct the votes on these matters before us by a poll.
On a poll, each registered shareholder or their duly appointed proxy holder who is entitled to vote on the matter and has joined the meeting using their control number has one vote in respect of each share entitled to be voted on the matter and held by that shareholder. The poll will be open for all resolutions at the same time. Click the voting button on the left menu of your screen when the poll is announced. This will allow you to choose to vote on each resolution immediately and wait until conclusion of discussion on each resolution prior to casting your vote. There will be an opportunity to ask questions on each resolution in turn. To submit a question, click the Ask a Question button on the left menu of your screen and type your question in the text box.
Once discussion on each item of business has concluded, I will give you approximately a minute to enter your vote if you have not done so already. Once discussion on all items of business has concluded, we'll provide a final opportunity to vote and then declare the vote closed on all resolutions. I now declare the poll is open on all resolutions. Registered shareholders and duly appointed proxy holders who have joined the meeting using their control number, you may now click on the voting button in order to cast your votes or vote once discussion on each item has concluded. If you have already submitted your votes in advance and do not wish to submit your vote, you do not need to take further action. To expedite matters today, Mr. Sheparski and I will move and second all motions with respect to the business of the meeting.
This is designed to facilitate the progression of the meeting and not intended to discourage comments. A copy of the materials, together with an affidavit of TSX Trust Company confirming such materials were properly mailed to shareholders, will be kept by the Secretary with the records of the meeting. The minutes of last year's annual meeting held on May 4, 2023, are available should any shareholder wish to review them. The transfer agent has provided the preliminary report on attendance, and based on this report, the Secretary has confirmed that there is a quorum present. I therefore declare that the meeting is properly constituted for the transaction of business for which it has been called. I will now table the corporation's 2023 annual report to shareholders, which includes the 2023 financial statements together with the auditor's report.
Copies of our annual report were mailed to the registered shareholders and are accessible on the corporation's website and profile on SEDAR+. We will now proceed to the appointment of auditors. As stated in the notice of meeting, it is the intention of the persons named in the form of proxy to vote in favor of a resolution appointing PricewaterhouseCoopers LLP as auditors of the corporation to hold office until the next annual meeting and authorizing the board to fix the remuneration subject to contrary instruction given in the form of proxy.
Mr. Chairman, I'll move that PricewaterhouseCoopers LLP be appointed auditors of the corporation until the next annual meeting and that the directors be authorized to fix the remuneration.
Thank you, Mr. Sheparski. I second the motion. To submit a question, click the Ask a Question button on the left menu of your screen and type your question in the text box. If you have not already, please cast your votes using the voting button before we move on to the next item. We will now proceed with the election of six directors, each of whom is to be elected at this meeting to hold office until the next annual meeting. Particulars of the six director nominees are set out in the Management Information Circular, which accompanies the notice of meeting sent to shareholders. As stated in the notice of meeting, it is the intention of the person's name in the form of proxy to vote in favor of the election of each of the six director nominees subject to contrary instructions given in the form of proxy.
I will now call for nominations for the election of six directors of the corporation.
Mr. Chairman, I nominate the following persons: Malcolm Cockwell, Heather Fitzpatrick, Karen Oldfield, Erika Reilly, Bruce Robertson, and Adam Sheparski, and move that they be elected directors of the corporation to hold office until the next annual meeting.
Thank you, Mr. Sheparski. Are there any further nominations? We do no further nominations. I declare the nominations closed.
Mr. Chairman, I will move that those nominees whose names have been read be elected to serve as directors of the corporation until the next annual meeting of shareholders or until their successors are elected or appointed.
Thank you, Mr. Sheparski. I second the motion. To submit a question, click the Ask a Question button on the left menu of your screen and type your question in the text box. If you have not already, please cast your votes using the voting button. This being our final resolution, for those of you who have not voted on either of the resolutions, please do so now as I will shortly close the poll. The polls are now closed, and I will read the results. Management has received proxies representing over 99% of the votes cast in favor of this resolution appointing PricewaterhouseCoopers LLP as auditors of the corporation to hold office until the next annual meeting and authorizing the board to fix their remuneration.
Since the votes withheld for this resolution are minimal, I will take the voting results from the proxy tabulation report and declare the motion carried. Management has received proxies representing over 98% of the votes cast in favor of each of the directors nominated. Since the votes withheld for each nominee are minimal, I will take the voting results from the proxy tabulation report and declare the motion carried. As there are six persons nominated for the same number of positions, I now declare that those nominated have been duly elected directors of the corporation. Thank you, ladies and gentlemen. This concludes the formal part of today's meeting. Now I will turn the meeting over to Mr. Sheparski.
Thanks, Mr. Chairman, and good morning, everyone. Before I start my comments, I would like to remind listeners that during the course of our presentation and in responding to questions about our financial and operating performance, we may make forward-looking statements. The statements are subject to known and unknown risks, and future results may differ materially. For further information on our risk factors, I encourage you to review the Acadian annual report, an annual information form, which are posted on our website at acadiantimber.com. Today, I'll start by providing you with a brief overview of our business and then discuss the company's achievements and performance during 2023. I will also provide an update on our performance so far in 2024 and comment on the outlook for the remainder of the year, after which I would be happy to take any questions. Let's begin with an overview of the business.
Acadian is a leading sustainable forest management company in Eastern North America. We own and manage approximately 1.1 million acres of private timberlands located in New Brunswick, Maine, and manage an additional 1.3 million acres of Crown land in New Brunswick, with all of our operations being SFI certified. Acadian timberlands have been under active management for over 100 years. We have a very complete and comprehensive infrastructure in place and longstanding relationships with a large number of customers. Our strategy is to maximize cash flows from our timberland assets through sustainable forest management and other land use activities, and then flow through the majority of our cash flows to our shareholders. Our primary business is forest management and the production of forest products, including saw logs, pulp wood, and biomass on our freehold timberlands, as well as providing forest management services on Crown lands.
We also have flexibility to generate significant revenues through other land use activities, including real estate and environmental solutions. Environmental solutions include the development and sale of voluntary carbon credits on our first carbon credit project in Maine. This project, which is on the portion of our Maine timberlands that is subject to a working forest conservation easement, requires balancing harvest and growth, long-term planning, periodic carbon inventory verification, and maintenance of Acadian's sustainable forestry certification. Current real estate activities include land leases, land sales, and revenues from recreational use. We are always exploring opportunities to derive additional revenues from our forests while maintaining the same high standards of management. Turning to a review of Acadian's performance in 2023. As always, Acadian remains committed to health and safety as our number one priority.
We are pleased with our results for 2023, which included only one recordable safety incident among employees, which was a minor slip and fall, and none among our contractors. As we have said before, we believe that emphasizing and achieving an excellent safety record is a leading indicator of success in the broader business. Fiscal 2023 was an operationally challenging year, particularly for our Maine operations. While weather conditions were generally favorable in New Brunswick, Maine experienced difficulties caused by weather at various times throughout the year. The first quarter brought unseasonably warm and wet weather, which prevented the ground from freezing, and excessive rainfall in the third quarter made for extremely muddy conditions, which continued into the fourth quarter.
Similarly, while New Brunswick was able to make considerable progress increasing contractor availability and finish the year in an improved position in this regard, harvest volumes in Maine continued to be hindered. Although capacity increased as we exited fiscal 2023 and into 2024, management remains focused on expanding our contractor base and decreasing our variable costs. As we have discussed previously, the favorable attributes of the Northeast region continue to provide stability on demand and pricing of our products. Turning to our carbon credit project, in June 2023, we registered the first 770,000 carbon credits associated with this project on the American Carbon Registry under the name Anew – Katahdin Forestry Project.
We completed our first sale at the end of December 2023, and while the volume sold was modest at 1,500 credits, the sale demonstrated the quality of the project and solid pricing of just under $25 per credit. I will provide a further update on our carbon credit project when discussing our first quarter results. Now turning to our financial results. During 2023, Acadian generated sales of CAD 93.5 million compared to CAD 90.5 million in the prior year as a result of increased pricing partially offset by decreased sales volumes. Demand for all products remained stable. However, sales volume, excluding biomass, increased 5% as a result of challenging operating conditions, as I just discussed. Acadian's weighted average selling price, excluding biomass, increased 5%, but it came from strong softwood sawlogs and pulp wood prices partially offset by decreased hardwood sawlogs prices stemming from weaknesses in hardwood lumber pricing.
In 2023, the company's Adjusted EBITDA totaled $20.6 million compared to $18.2 million during 2022, and Adjusted EBITDA margin was 22% compared to 20% in the prior year. Acadian generated free cash flow per share of $0.88 in 2023 compared to $0.72 in 2022. Total dividends to shareholders during the year ended December 31st, 2023, were $19.8 million or $1.16 per share, consistent with 2022. The payout ratio of Acadian, which represents the amount of dividends declared as a percentage of the free cash flow generated, was 132% for 2023 or 99% based on cash dividends paid. Acadian ended the year with a solid net liquidity position of $14.8 million, which includes cash and funds available under the revolving credit facilities. Turning to our performance during the first quarter of 2024. Acadian experienced a very positive first quarter.
In addition to solid results from our timber operations, we reached an agreement to sell 752,000 voluntary carbon credits at the end of the third quarter at strong pricing, including 152,000, which were delivered during the first quarter. We executed an agreement for the option to lease approximately 10,000 acres of our Maine timberlands for the purpose of the development of a solar-powered electric generating facility, and we purchased 16,000 acres of well-stocked timberlands in New Brunswick that include significant potential for other land use revenue. Turning to our financial highlights. As reported yesterday, Acadian generated timber sales of $23.9 million compared to $22.4 million in the comparable period of 2023. In addition, we generated $4.9 million from the sale of 152,000 voluntary carbon credits during the first quarter.
Timber sales increased $1.5 million year-over-year as a result of a 35% increase in sales volume, partially offset by lower timber services activity. The higher sales volumes were primarily a result of increased contractor availability, partially offset by the impacts of unfavorable weather conditions, which brought an early start to spring. Weighted average selling price, excluding biomass, increased 2% year-over-year. Increases in softwood prices were offset by decreases in hardwood sawlogs prices due to weaknesses in hardwood lumber markets and decreases in hardwood pulp pricing, which is attributable to elevated pricing in the first quarter of 2023 resulting in shorter timber supply in that period. Operating costs and expenses were $21.2 million during the first quarter compared to $17.1 million during the prior year period.
The year-over-year increase reflects the addition of costs related to carbon credit sales as well as higher timber sales volumes, partially offset by lower timber services activity in New Brunswick. Weighted average variable harvesting costs, excluding biomass, increased 5% over the prior year period as a result of higher contracting costs and longer hauling distances during the first quarter of 2024. Adjusted EBITDA was $10.6 million during the first quarter compared to $5.6 million in the prior year period. Adjusted EBITDA margin for the quarter was 37% compared to 25% in the prior year period. Free cash flow was $7.8 million, $4.1 million higher than the same period in the prior year. Net income for the first quarter totaled $6 million or $0.35 per share, compared to net income of $5.6 million or $0.33 per share in the same period of 2023.
Higher operating income was offset by lower non-cash fair value adjustments and lower gains on the sale of timberlands and other fixed assets, as well as higher income tax expense as compared to the prior year period. Acadian declared dividends of $5 million to our shareholders during the first quarter or $0.29 per share. Turning to our outlook for the remainder of 2024. Because demand for Acadian saw logs is mainly driven by regional supply and demand of logs, stable saw log demand and prices are largely expected to continue as we progress through the year despite weaknesses in lumber markets. Markets for hardwood pulp wood are expected to remain stable in the near term, and the improved softwood pulp wood market experience in 2022 are expected to continue.
Low regional inventories as a result of the unfavorable weather conditions during the first quarter are expected to contribute to stable demand and pricing as we progress through 2024, and we are optimistic that the increased contractor capacity we have secured will allow us to keep up on much of the volume shortfall of the first quarter. Although markets for voluntary carbon credit slowed somewhat during 2023, demand is expected to remain stable and pricing to hold steady. The remaining 600,000 carbon credits included in the sales agreement reached during the first quarter are expected to be delivered prior to the end of the third quarter of 2024. The registration of the second and third tranches is expected to be completed in the second half of 2024 and is expected to result in approximately 360,000 credits being made available for sale.
We are grounded by our vision, which is our commitment to long-term sustainable land management for the benefit of our stakeholders. We are committed to operating safely and managing our forest in a manner that is consistent with the principles of sustainable forestry. We are focused on retaining strong relationships with our diversified base of customers and contractors to ensure the long-term success of our business. We recognize the importance of making positive contributions to the communities in which we live and work, and we continue to innovate in order to improve cash flow and provide attractive and sustainable distributions to our shareholders. At Acadian, we have the team, structure, and balance sheet to successfully weather challenging operating or market conditions as they arise, and we are dedicated to providing long-term value for shareholders.
Before I conclude, on behalf of the management team, I would like to thank our employees and contractors for their hard work, contributions, and commitment to Acadian. This concludes my presentation, and I would now welcome any questions. With no questions received, I will now turn the meeting back to you, Mr. Chairman.
Thank you, Mr. Sheparski. Ladies and gentlemen, I would like to thank you for your participation and attendance in today's meeting. This brings us to the end of today's meeting. As there is no other business, I declare the meeting terminated. Thank you.